RAHUL RAMESHBHAI DOBARIYA,RAJKOT vs. INCOME TAX OFFICER WARD - 1(1)(1), RAJKOT, RAJKOT

PDF · subscribers
ITA 391/RJT/2026Status: DisposedITAT Rajkot10 July 2026AY 2020-213 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal, following a coordinate bench decision with identical facts, directed that the addition be restricted to 10% of the alleged cash payment (Rs. 52,500). This amount was to be taxed under the normal provisions of the Act, not under Section 115BBE.

What were the facts?

The Assessing Officer reopened the assessment based on information from a search operation alleging the assessee made a cash payment of Rs. 5,25,000 for property purchase. The assessee denied this, but the AO treated it as unexplained money and taxed it under Section 115BBE.

What were the issues?

Whether the addition of unexplained cash payment was justified, and if so, whether it should be taxed under Section 115BBE or normal provisions.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 69A,Section 115BBE,Section 139(1),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Rajkot Bench, Rajkot

Before: Dr. Arjun Lal Saini & Shri Sonjoy Sarma

For Appellant: Shri Kardam Joshi, Ld. AR
For Respondent: Shri Ganesh Iyer, Ld. Sr. DR
Hearing: 07/07/2026Pronounced: 10/07/2026

आयकर अपीलीय अिधकरण, राजकोट �यायपीठ, राजकोट। In The Income Tax Appellate Tribunal, Rajkot Bench, Rajkot Before Dr. Arjun Lal Saini, Accountant Member And Shri Sonjoy Sarma, Judicial Member

आयकर अपील सं./ITA No. 391/RJT/2026 [ �नधा�रण वष�/Assessment Year: 2020-21 ] Rahul Rameshbhai Dobariya Income Tax Officer Ward - 1(1)(1), New Radheshyam Society, Street No. Aaykar Bhavan, Race Course Ring Vs. 6, Near Ram Jarukha, Kothariya Road, Road, Rajkot-360001 Rajkot - 360 002, Rajkot-360002 Gujarat Gujarat �थायीलेखासं./जीआइआरसं./PAN/GIR No.: BMFPD8671L (अपीलाथ�/Appellant) (��यथ�/Respondent) Appellant by : Shri Kardam Joshi, Ld. AR Respondent by : Shri Ganesh Iyer, Ld. Sr. DR Date of Hearing : 07/07/2026 Date of Pronouncement : 10/07/2026

:: ORDER :: Per, Shri Sonjoy Sarma, JM: Captioned appeal filed by the assessee, pertaining to assessment year (AY) 2020-21, is directed against the order under section 250 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by the National Faceless Appeal Centre [in short ‘NFAC’], dated 30.01.2026, which in turn arises out of an assessment order passed by the Assessing Officer u/s 147 of the Act, dated 16.03.2025.

2.

The assessee filed its return of income under section 139(1) of the Income-tax Act, 1961 declaring a total income of Rs.3,52,800. Subsequently, information was

ITA No. 391/RJT/2026 Rahul Rameshbhai Dobariya received by the Assessing officer pursuant to a search and seizure operation conducted on the R.K. Group, wherein it was revealed that the assessee had allegedly made payment in cash. Based on the said information, the assessment was reopened under section 147 of the Act by issuing notice under section 148. In response, the assessee filed its return declaring the same income as originally returned. During the course of assessment proceedings, the Assessing Officer relied upon data found in the accounting software seized during the search on the R.K. Group, which indicated that the assessee had paid cash of Rs.5,25,000 for purchase of an office in the project R.K.Empire. The assessee denied having made any such cash payment and objected to the reliance placed on third-party material without any independent corroboration or opportunity for effective cross-examination. The explanation furnished by the assessee was not accepted by the Assessing Officer, who held that the assessee had failed to explain the source of the alleged cash payment. Accordingly, the amount of Rs.5,25,000 was treated as unexplained money under section 69A and taxed under the provisions of section 115BBE of the Act.

3.

Aggrieved, the assessee preferred an appeal before the Commissioner of Income-tax (Appeals). The learned CIT(A) dismissed the appeal and confirmed the addition made by the Assessing Officer.

4.

Being further aggrieved, the assessee preferred the present appeal before the Tribunal. It was contended that the reopening of the assessment was solely based on third-party information and was therefore not sustainable in law. Without prejudice, the assessee submitted that, in order to buy peace and avoid prolonged litigation, it was willing to offer an appropriate amount as additional income, taxable under the normal provisions of the Act instead of under section 115BBE.During the course of hearing, it was submitted that the issue was squarely covered by the decision of the

Page 2 of 3

ITA No. 391/RJT/2026 Rahul Rameshbhai Dobariya Tribunal in ITA No. 506/Rjt/2026, involving identical facts, wherein the Tribunal had sustained the addition only to the extent of 10% of the alleged cash payment and directed that such addition be taxed under the normal provisions of the Act. The assessee fairly submitted that, following the said decision, assessee was willing to accept an addition of 10% of Rs.5,25,000, amounting to Rs.52,500 as additional income. We, respectfully following the decision of the Coordinate Bench in ITA No. 506/Rjt/2026, the we directed the Assessing Officer to restrict the addition to Rs.52,500, being 10% of Rs.5,25,000, and further directed that the said amount shall be assessed under the normal provisions of the Income-tax Act and not under section 115BBE of the Act.

5.

Accordingly, the appeal of the assessee was allowed for statistical purposes.

Order pronounced in the open court on this 10th day of July, 2026.

Sd/- Sd/- [ Dr. Arjun Lal Saini ] [ Shri Sonjoy Sarma ] लेखा सद�य/Accountant Member �याियक सद�य/Judicial Member राजकोट/Rajkot िदनांक/ Date: 10/07/2026 Copy of the order forwarded to : 1. The assessee 2. The Respondent 3. CIT 4. The CIT(A) 5. DR, ITAT, Rajkot 6. Guard File By order //True Copy// Sr. Private Secretary ITAT, Rajkot

Page 3 of 3

More judgments on Section 147

All 49,210 judgments and leading authorities on Section 147 →

Latest GST High Court judgments

Search GST case law →